Question 1

Lewis Production Company had the following projected information for 2006:  
- What is the profit when one unit more than the break-even point is sold?

Accepted Answer

A)  $150 
B)  $60 
C)  $1,500,150 
D)  $600,060 
A)  $150 
B)  $60 
C)  $1,500,150 
D)  $600,060

Question 2

Figure 16 - 1 The Kringel Company provides the following information:
 
- Refer to Figure 16-1.What is the variable product cost per unit for Kringel?

Accepted Answer

A)  $0.85 
B)  $1.25 
C)  $0.40 
D)  $2.50 
A)  $0.85 
B)  $1.25 
C)  $0.40 
D)  $2.50

Question 3

Figure 16 - 1 The Kringel Company provides the following information:
  
-Refer to Figure 16-1.What is the contribution margin ratio for Kringel?

Accepted Answer

A)  0.50 
B)  .76 
C)  .16 
D)  .34 
A)  0.50 
B)  .76 
C)  .16 
D)  .34

Question 4

Product 1 has a contribution margin of $6.00 per unit, and Product 2 has a contribution margin of $7.50 per unit.Total fixed costs are $300,000.Sales mix and total volume varies from one period to another.Which of the following is TRUE?

Accepted Answer

A)  At a sales volume in excess of 25,000 units of 1 and 25,000 units of 2, operations will be profitable. 
B)  The ratio of net profit to total sales for 2 will be larger than the ratio of net profit to total sales for 1. 
C)  The contribution margin per unit of direct materials is lower for 1 than for 2. 
D)  The ratio of contribution to total sales always will be larger for 1 than for 2. 
A)  At a sales volume in excess of 25,000 units of 1 and 25,000 units of 2, operations will be profitable. 
B)  The ratio of net profit to total sales for 2 will be larger than the ratio of net profit to total sales for 1. 
C)  The contribution margin per unit of direct materials is lower for 1 than for 2. 
D)  The ratio of contribution to total sales always will be larger for 1 than for 2.

Question 5

Assume the following information:   What volume of sales dollars is needed to break even?

Accepted Answer

A)  $75,000 
B)  $300,000 
C)  $48,000 
D)  $12,000 
A)  $75,000 
B)  $300,000 
C)  $48,000 
D)  $12,000

Question 6

In a cost-volume-profit graph,

Accepted Answer

A)  the total revenue line crosses the horizontal axis at the break-even point. 
B)  beyond the break-even sales volume, profits are maximized at the sales volume where total revenues equal total costs. 
C)  an increase in unit variable costs would decrease the slope of the total cost line. 
D)  an increase in the unit selling price would shift the break-even point in units to the left. 
A)  the total revenue line crosses the horizontal axis at the break-even point. 
B)  beyond the break-even sales volume, profits are maximized at the sales volume where total revenues equal total costs. 
C)  an increase in unit variable costs would decrease the slope of the total cost line. 
D)  an increase in the unit selling price would shift the break-even point in units to the left.

Question 7

On a profit-volume graph, the profit line intersects the horizontal axis at

Accepted Answer

A)  the origin. 
B)  the break-even point. 
C)  a volume of 1,000 units. 
D)  a point where profit is greater than zero. 
A)  the origin. 
B)  the break-even point. 
C)  a volume of 1,000 units. 
D)  a point where profit is greater than zero.

Question 8

Urban Incorporated had the following information:   
-What is the break-even point in units using ABC?

Accepted Answer

A)  5,625 units 
B)  16,875 units 
C)  7,500 units 
D)  11,250 units 
A)  5,625 units 
B)  16,875 units 
C)  7,500 units 
D)  11,250 units

Question 9

In multiple-product analysis, direct fixed costs are

Accepted Answer

A)  fixed costs that are not traceable to the segments and would remain even if one of the segments were eliminated. 
B)  fixed costs which can be traced to each segment and would remain even if one of the segments were eliminated. 
C)  fixed costs that are not traceable to the segments and would be avoided if the segment did not exist. 
D)  the fixed costs which can be traced to each segment and would be avoided if the segment did not exist. 
A)  fixed costs that are not traceable to the segments and would remain even if one of the segments were eliminated. 
B)  fixed costs which can be traced to each segment and would remain even if one of the segments were eliminated. 
C)  fixed costs that are not traceable to the segments and would be avoided if the segment did not exist. 
D)  the fixed costs which can be traced to each segment and would be avoided if the segment did not exist.

Question 10

In a cost-volume-profit graph, the slope of the total revenue line represents

Accepted Answer

A)  the selling price per unit. 
B)  the contribution margin per unit. 
C)  the variable cost per unit. 
D)  total contribution margin. 
A)  the selling price per unit. 
B)  the contribution margin per unit. 
C)  the variable cost per unit. 
D)  total contribution margin.

Question 11

Which of the following items would NOT be considered in cost-volume-profit analysis?

Accepted Answer

A)  units of production 
B)  fixed costs 
C)  product mix 
D)  gross profit margin 
A)  units of production 
B)  fixed costs 
C)  product mix 
D)  gross profit margin

Question 12

Figure 16 - 1 The Kringel Company provides the following information:
  
-Refer to Figure 16-1.What is the contribution margin per unit for Kringel?

Accepted Answer

A)  $0.85 
B)  $1.25 
C)  $2.50 
D)  $1.65 
A)  $0.85 
B)  $1.25 
C)  $2.50 
D)  $1.65

Question 13

The following diagram is a cost-volume-profit graph for a manufacturing company:  
- Select the answer that best describes the labeled item on the diagram.

Accepted Answer

A)  Area CDE represents the area of net loss. 
B)  Line AC graphs total fixed costs. 
C)  Point D represents the point at which the contribution margin per unit increases. 
D)  Line AC graphs total costs. 
A)  Area CDE represents the area of net loss. 
B)  Line AC graphs total fixed costs. 
C)  Point D represents the point at which the contribution margin per unit increases. 
D)  Line AC graphs total costs.

Question 14

Sarah Smith, a sole proprietor, has the following projected figures for next year:   How many units must be sold to obtain a target before-tax profit of $270,000?

Accepted Answer

A)  6,000 units 
B)  20,000 units 
C)  8,572 units 
D)  14,000 units 
A)  6,000 units 
B)  20,000 units 
C)  8,572 units 
D)  14,000 units

Question 15

In 2011, Angel's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500. The annual sales volume required for Angel's to have a before-tax income of $18,000 is

Accepted Answer

A)  $126,000. 
B)  $84,000. 
C)  $73,500. 
D)  $42,000. 
A)  $126,000. 
B)  $84,000. 
C)  $73,500. 
D)  $42,000.

Question 16

Baker Company sells its product for $60.In addition, it has a variable cost ratio of 40 percent and total fixed costs of $9,000.How many units must be sold in order to obtain a before-tax profit of $12,000?

Accepted Answer

A)  350 units 
B)  584 units 
C)  875 units 
D)  333 units 
A)  350 units 
B)  584 units 
C)  875 units 
D)  333 units

Question 17

Dirth Company sells only one product at a regular price of $7.50 per unit.Variable expenses are 60 percent of sales and fixed expenses are $30,000.Management has decided to decrease the selling price to $6.00 in hopes of increasing its volume of sales.
- What is the contribution margin ratio when the selling price is reduced to $6 per unit?

Accepted Answer

A)  25% 
B)  40% 
C)  75% 
D)  60% 
A)  25% 
B)  40% 
C)  75% 
D)  60%

Question 18

The following diagram is a cost-volume-profit graph for a manufacturing company:   
-The formula to determine the Y-axis value ($) at point D on the graph is

Accepted Answer

A)  Fixed costs + (Variable costs per unit ´ Number of units). 
B)  SXY - bSX. 
C)  Fixed costs/Unit contribution margin. 
D)  Fixed costs/Contribution margin ratio. 
A)  Fixed costs + (Variable costs per unit ´ Number of units). 
B)  SXY - bSX. 
C)  Fixed costs/Unit contribution margin. 
D)  Fixed costs/Contribution margin ratio.

Question 19

The income statement for Thomas Manufacturing Company for 2011 is as follows:  
- If sales increase by 1,000 units, what will happen to profit?

Accepted Answer

A)  increase by $4,800 
B)  increase by $1,200 
C)  increase by $7,200 
D)  increase by $12,000 
A)  increase by $4,800 
B)  increase by $1,200 
C)  increase by $7,200 
D)  increase by $12,000

Question 20

The Kringel Company provides the following information:   What is the break-even point in sales dollars for Kringel?

Accepted Answer

A)  $25,000 
B)  $83,333 
C)  $100,000 
D)  $250,000 
A)  $25,000 
B)  $83,333 
C)  $100,000 
D)  $250,000

Lewis Production Company had the following projected information for 2006: - What is the profit when one unit more than the break-even point is sold?

Figure 16 - 1 The Kringel Company provides the following information: - Refer to Figure 16-1.What is the variable product cost per unit for Kringel?

Figure 16 - 1 The Kringel Company provides the following information: -Refer to Figure 16-1.What is the contribution margin ratio for Kringel?

Product 1 has a contribution margin of $6.00 per unit, and Product 2 has a contribution margin of $7.50 per unit.Total fixed costs are $300,000.Sales mix and total volume varies from one period to another.Which of the following is TRUE?

Assume the following information: What volume of sales dollars is needed to break even?

In a cost-volume-profit graph,

On a profit-volume graph, the profit line intersects the horizontal axis at

Urban Incorporated had the following information: -What is the break-even point in units using ABC?

In multiple-product analysis, direct fixed costs are

In a cost-volume-profit graph, the slope of the total revenue line represents

Which of the following items would NOT be considered in cost-volume-profit analysis?

Figure 16 - 1 The Kringel Company provides the following information: -Refer to Figure 16-1.What is the contribution margin per unit for Kringel?

The following diagram is a cost-volume-profit graph for a manufacturing company: - Select the answer that best describes the labeled item on the diagram.

Sarah Smith, a sole proprietor, has the following projected figures for next year: How many units must be sold to obtain a target before-tax profit of $270,000?

In 2011, Angel's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500. The annual sales volume required for Angel's to have a before-tax income of $18,000 is

Baker Company sells its product for $60.In addition, it has a variable cost ratio of 40 percent and total fixed costs of $9,000.How many units must be sold in order to obtain a before-tax profit of $12,000?

The following diagram is a cost-volume-profit graph for a manufacturing company: -The formula to determine the Y-axis value ($) at point D on the graph is

The income statement for Thomas Manufacturing Company for 2011 is as follows: - If sales increase by 1,000 units, what will happen to profit?

The Kringel Company provides the following information: What is the break-even point in sales dollars for Kringel?

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 16: Cost-Volume-Profit Analysis

Lewis Production Company had the following projected information for 2006: - What is the profit when one unit more than the break-even point is sold?

Figure 16 - 1 The Kringel Company provides the following information: - Refer to Figure 16-1.What is the variable product cost per unit for Kringel?

Figure 16 - 1 The Kringel Company provides the following information: -Refer to Figure 16-1.What is the contribution margin ratio for Kringel?

Product 1 has a contribution margin of $6.00 per unit, and Product 2 has a contribution margin of $7.50 per unit.Total fixed costs are $300,000.Sales mix and total volume varies from one period to another.Which of the following is TRUE?

Assume the following information: What volume of sales dollars is needed to break even?

In a cost-volume-profit graph,

On a profit-volume graph, the profit line intersects the horizontal axis at

Urban Incorporated had the following information: -What is the break-even point in units using ABC?

In multiple-product analysis, direct fixed costs are

In a cost-volume-profit graph, the slope of the total revenue line represents

Which of the following items would NOT be considered in cost-volume-profit analysis?

Figure 16 - 1 The Kringel Company provides the following information: -Refer to Figure 16-1.What is the contribution margin per unit for Kringel?

The following diagram is a cost-volume-profit graph for a manufacturing company: - Select the answer that best describes the labeled item on the diagram.

Sarah Smith, a sole proprietor, has the following projected figures for next year: How many units must be sold to obtain a target before-tax profit of $270,000?

In 2011, Angel's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500. The annual sales volume required for Angel's to have a before-tax income of $18,000 is

Baker Company sells its product for $60.In addition, it has a variable cost ratio of 40 percent and total fixed costs of $9,000.How many units must be sold in order to obtain a before-tax profit of $12,000?

The following diagram is a cost-volume-profit graph for a manufacturing company: -The formula to determine the Y-axis value ($) at point D on the graph is

The income statement for Thomas Manufacturing Company for 2011 is as follows: - If sales increase by 1,000 units, what will happen to profit?

The Kringel Company provides the following information: What is the break-even point in sales dollars for Kringel?

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters